It's now becoming more clear WHY, they jammed this legislation down our throats. Hope you Obama and Pelosi (we have to pass it to find out what's in it) apologists are happy.
Health care law's massive, hidden tax change
NEW YORK (CNNMoney.com) -- An all-but-overlooked provision of the health reform law is threatening to swamp U.S. businesses with a flood of new tax paperwork.
Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.
The stealth change radically alters the nature of 1099s and means businesses will have to issue millions of new tax documents each year.
Right now, the IRS Form 1099 is used to document income for individual workers other than wages and salaries. Freelancers receive them each year from their clients, and businesses issue them to the independent contractors they hire.
But under the new rules, if a freelance designer buys a new iMac from the Apple Store, they'll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.
The bill makes two key changes to how 1099s are used. First, it expands their scope by using them to track payments not only for services but also for tangible goods. Plus, it requires that 1099s be issued not just to individuals, but also to corporations.
Taken together, the two seemingly small changes will require millions of additional forms to be sent out.
Health-care law places limit on flexible-spending accounts
f you are one of 20 million Americans who like to put a few thousand dollars every year into a flexible-spending health account, you might be in for a surprise.
Tucked inside the health-care overhaul is a little-noticed section that limits to $2,500 a year the amount of pre-tax money a worker can steer to his or her account.
Because many companies allow their workers to pay as much as $5,000 a year into the tax-free accounts, the new limits will mean higher taxes for people in middle- and upper-middle-income groups. The Congressional Joint Committee on Taxation calculates the reduction will cost taxpayers $13 billion from 2013 through 2019.
"There will be some individuals who are already above the $2,500 limit, and once this takes effect, then the expenses they could previously declare without paying income taxes on them will be limited," said Pete Sepp, a spokesman for the National Taxpayers Union, a conservative nonprofit group in Washington.
Although the $2,500 limit will rise annually with the Consumer Price Index, Sepp said families earning less than $250,000 are likely to find that their tax liabilities will increase. Obama has pledged not to raise taxes on individuals earning less than $200,000 annually or families making less than $250,000 a year.
"Larger families, especially with young children, could easily exceed the $2,500 threshold, so there could be many thousands of families affected by this whose income is well below $250,000," Sepp said.
But Judy Feder, a health-policy analyst at the liberal Center for American Progress in Washington, said many people use the flexible-spending accounts just to avoid taxes, and "the dollars you put aside can serve as tax shelters, not as vehicles for insurance purposes."
What a stupid C**T. Flex Spending accounts are tax shelters?
I guess they could be if you didn't lose the money if you don't spend it by the end of the year.
Gold Coin Sellers Angered by New Tax Law
Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.
This provision, intended to mine what the IRS deems a vast reservoir of uncollected income tax, was included in the health care legislation ostensibly as a way to pay for it. The tax code tweak is expected to raise $17 billion over the next 10 years, according to the Joint Committee on Taxation.
"Coin dealers not only buy for their inventory from other dealers, but also with great frequency from the public," Piret said. "Most other types of businesses will have a limited number of suppliers from which they buy their goods and products for resale."
Pat Heller, who owns Liberty Coin Service in Lansing, Mich., deals with around 1,000 customers every week. Many are individuals looking to protect wealth in an uncertain economy, he said, while others are dealers like him.
With spot market prices for gold at nearly $1,200 an ounce, Heller estimates that he'll be filling out between 10,000 and 20,000 tax forms per year after the new law takes effect.
"I'll have to hire two full-time people just to track all this stuff, which cuts into my profitability," he said.
And you people still want to blame Bush?
In this Obama economic environment, only a fool would want to start or expand a business.
